PA 09-40—SB 251

Housing Committee

Planning and Development Committee

AN ACT CONCERNING HOUSING DEVELOPMENT IN ENTERPRISE ZONES

SUMMARY: This act eliminates the option community development organizations previously had to use Department of Economic and Community Development (DECD) grants to build or rehabilitate either decent or affordable rental or owner-occupied housing in enterprise zones. It instead specifies that the organizations may use the grants to build or rehabilitate housing only for low- and moderate-income people.

EFFECTIVE DATE: October 1, 2009

BACKGROUND

Low- and Moderate-Income

Housing for low- and moderate-income people typically refers to residences for people earning 80% or less of the area median income (AMI), with low-income referring more specifically to those earning 60% or less of AMI.

Community Development Grants

The law requires DECD to establish a financial assistance program for job development and creation, neighborhood revitalization, and business stability and development promotion in enterprise zones. DECD's commissioner must solicit applications from community development organizations (which the statute does not define) located in enterprise zones to operate the programs. Applicants must indicate a strategy to achieve neighborhood economic development in the zone.

Under the law, the commissioner must contract with and provide grants within available funds to qualified community development organizations. The organizations may provide grants, loans, or deferred loans to eligible applicants. The law requires the DECD commissioner to set criteria for eligible applicants and activities.

Enterprise Zones

The law explicitly authorizes 15 enterprise zones, all of which have been designated. It also authorizes the designation of additional zones under narrow criteria, and two of these have been designated. The municipalities with enterprise zones are: Bridgeport, Bristol, East Hartford, Groton, Hamden, Hartford, Meriden, Middletown, New Britain, New Haven, New London, Norwalk, Norwich, Southington, Stamford, Waterbury, and Windham.

By law, these zones offer generally the same types of incentives—property tax exemptions and corporation business tax credits. In most cases, to receive an incentive, a business must improve property and create new jobs.

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